Consider this: 50 years ago, the life expectancy of a Fortune 500 firm was approximately 75 years.…
Consider this: 50 years ago, the life expectancy of a Fortune 500 firm was approximately 75 years. Today, it’s less than 15 years and continues to decline. Eighty-eight percent of the original companies listed have either gone bankrupt, merged or—if they still exist—fallen off the Fortune 500 list. The reason? A failure to keep up with the accelerated rate of innovation required in today’s fast-paced world. We like to think great innovation is based on magical ideas conjured up by visionary geniuses. At the risk of dashing that fantasy, the reality is more simple.
When we break down innovation into its most basic form, we see that it is actually a byproduct of the successful execution of three key business elements:
• A corporate culture that empowers and unleashes employee innovation
• A relentless focus on opportunities that have the best return on investment
• The continuous discipline to manage the things that matter most
The most important element dictating whether or not innovation will succeed is company culture. Culture doesn’t mean proclaiming that your company is innovative. Instead, culture is shaped by a mosaic of shared rules, practices and artifacts that are not only expressed in formal ways, like organizational charts, job descriptions and the physical layout of your office, but also in informal ways, like social networks based on personal relationships both inside and outside the office.
Establishing a culture of innovation means you can point to specific, tangible things within your company that confirm and reinforce innovative practices. To establish a culture that drives innovation, you must start with an understanding that innovation occurs when you are passionate about solving problems for people outside the walls of your company. If you want to cultivate a culture that fosters innovation, you have to start by empowering employees to unleash this passion.
Unfortunately, while marketing and product teams
are often told to be strategic, understand the market and spend time with customers, too often companies don’t practice what they preach. Instead, employees are chained to their desks, managing checklists, returning emails and attending meetings.
In Pragmatic Marketing’s 2017 annual survey of product managers and marketers, more than 3,500 respondents said their corporate cultures are decidedly inward-facing. They reported spending 72 percent of their time on tactical activities. If we believe that the source of innovation is solving customer problems, this statistic shows we are not supporting the cultural practices that inspire innovation.
Worse, there may be a sense that giving the team time to talk to customers or identify new market opportunities is an unaffordable luxury. You might hear things like, “We don’t have budget to spend time in the market” or “I can’t really have you take time away from the office.” Then you do something incredibly risky: make stuff up. And the company never stops to think that when it builds products without market knowledge, it is ultimately more expensive and risky than establishing a market-driven culture.
Establishing a culture of innovation means that you must empower your teams to be market-driven by encouraging them to get outside the office. Encourage them to spend less time on emails and meetings and more time on market interactions. Then set a quantifiable goal. For example, for the next 12 months, you could target at least 10 percent of their time outside of the office, talking directly to the market. This way, instead of building products based on assumptions, you listen to your customers and prospects and solve their actual problems.
Another reason innovation often fails is a lack of focus. If you run toward everything that looks like the next big thing or spend all your time chasing the competition, it’s easy to get sidetracked or lost.
According to a CareerCast survey, 62 percent of workers rate their jobs as highly stressful and list unpredictability as their most common stress factor. A lack of focus can create stress in your business. And when you are stressed, it is difficult to perform at optimal levels.
When you run around in an endless maze chasing big ideas or trying to execute the strategy of the day, it is hard to focus, much less to find the path forward. Your ability to pursue the best opportunities that will achieve a maximum return is inhibited. And your entire job can quickly become a frenzied response to urgent and demanding requests.
True innovation stems from an ability to say no. You need to focus your energy on things that have the greatest potential return for the least investment possible or, as Steve Jobs so eloquently put it, “Innovation is saying no to 1,000 things.”
To help drive focus into your business, start by having a clear answer to two simple questions: Who are you trying to delight? And what will you build to delight them? In other words, how will you allocate your resources to build products that satisfy your biggest market opportunities and produce the greatest returns? Continuous Discipline
Lack of discipline is the third reason innovation often fails. Although you may have established a market-driven culture and created focus, without the discipline to keep the first two on track, innovation will fail. The secret to long-term success is both constancy of purpose and the agility to adjust tactics when needed.
For innovation to succeed, you must understand your direction and use that information to drive organizational alignment. However, maintaining directional clarity at today’s speeds can be challenging. It took 38 years for television to be adopted by 50 million users. Twitter acquired the same number of users in just nine months.
Kirsten Butzow has 20 years of experience leading technology companies, including Fujitsu, Pearson and Blackboard. She has held vice president roles for the past 10 years, allowing her to bring a strong executive perspective to her role as a Pragmatic Marketing instructor. As a leader, she has directed product management portfolios, created business plans and strategic product roadmaps and implemented many aspects of the Pragmatic Marketing Framework. Contact Kirsten at firstname.lastname@example.org.